The Division Bench of the Delhi High Court in the case of National Highways Authority of India vs M/S. JMC Constructions Pvt. Ltd. consisting of Chief Justice Satish Chandra Sharma and Justice Subramonium Prasad reiterated that the jurisdiction of the High Court in appeal u/s 37 of the Arbitration and Conciliation Act, 1996 (“the Act”) cannot travel beyond the restrictions laid down u/s 34 of the Act.
Facts
An Agreement was entered into between the Appellant and the Respondent for execution of a certain project regarding “Short Term Improvement & Routine Maintenance” of a highway in Andhra Pradesh. The Appellant/National Highways Authority of India (‘NHAI’) sought to challenge the Judgment passed by the Ld. Single Judge wherein the Ld. Single Judge dismissed the petition filed by the Appellant u/s 34 of the Act whereunder an Award passed by the Arbitral Tribunal comprising of three members was challenged, which had allowed certain claims of the Respondent for payment of balance amount of money which included amounts towards increase in quantity of bitumen used on account of additional weight of bitumen in the design mix.
Contentions Made
Appellant: It was contended that a letter was issued by the Respondent, without any duress, wherein it was categorically stated that it would not claim over and above the 5% of increase in quantity of Bitumen used in the design mix in the work carried out by them during the tenure of the abovementioned work contract. So, the Tribunal could not have awarded any amount regarding the claim.
Respondent: It was contended that the said letter giving up the claim for the difference of the cost of bitumen was given only under duress, and the balance amount has not been released by the Appellant/NHAI.
Observations of the Court
The Bench noted that under the terms, if a higher percentage of bitumen over and above 5% was used then the contractor was entitled to additional amount. The Tribunal had, therefore, concluded that the Respondent was entitled to claim the cost of bitumen over and above 5%, which was upheld by the Tribunal.
The Bench then looked into the jurisdiction of the High Court while considering the appeal u/s 37 of the Act. Relying on MMTC Limited v. Vedanta Limited, K. Sugumar & Anr. v. Hindustan Petroleum Corporation Ltd & Anr. it reiterated that the scope of scrutiny u/s 34 of the Act is limited only to the grounds given u/s 34 of the Act and the extent of scrutiny is further narrowed u/s 37 of the Act. Applying the said law, the Tribunal concluded that the Respondent was entitled to the claim and that the letter was written under duress as the payments were not being released.
Judgment
Considering the facts and circumstances of the case, this Court while exercising its jurisdiction u/s 37 of the Act was not inclined to interfere with the conclusion arrived at by the Tribunal and the Ld. Single Judge. The appeal was hereby dismissed.
Case: National Highways Authority of India vs M/S. JMC Constructions Pvt. Ltd.
Citation: FAO(OS) (COMM) 42/2022 & CM APPLs. 8794-95/2022
Bench: Chief Justice Satish Chandra Sharma, Justice Subramonium Prasad
Decided on: 2nd September 2022
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